Better prices online? Not always, a new report says

By Allison EnrightEditor

A basket analysis shows lower-cost products are cheaper in stores than online.

In surveys examining why shoppers choose to shop online, consumers regularly cite their ability to find lower prices on the web. However, an analysis comparing the prices of identical products at bricks-and-mortar stores and online retailers shows that isn’t always the case. The analysis examined products across a range of product categories, including personal care, electronics, grocery, men’s apparel, toys and games, cleaning supplies and office and school supplies.

Anthem Marketing Solutions, a consulting firm, found that bricks-and-mortar stores offered the lowest prices on products that cost less than $7, and online retailers offered the best prices for items priced between $7 and $20. For items sold for $7 or less, the average store price was 15% cheaper than the average online price for more than 75% of the evaluated products. For products priced between $7 and $20, online retailers priced items an average of 9% less than stores for more than 80% of the evaluated products. The prices compared in the study excluded taxes and shipping fees.

Anthem says consumers are less likely to find significant price differences for consumer electronics and products that cost $100 or more, and there were too few products priced in the $20 to $100 range to draw a conclusion.

“Bricks-and-mortar stores have become more competitive in the electronics category and for items priced higher than $100, categories where online retailers had a definite advantage in fall 2010 and spring 2011,” the report says. A similar study from fall 2010 showed consumers more often found cheaper prices for products priced for less than $50 at stores, whereas those priced at $90 or more were more commonly cheaper online. “This continued price shift has implications for the apparent influence of online vendors on physical stores,” the report says. The report says stores are responding faster to price changes happening online, which may eventually change consumers’ perception that they’re more likely to find cheaper prices online.

The consulting firm says the products it included in its analysis were checked Nov. 7 and based on what a typical family would periodically buy. Online and in-store prices were compared for Wal-Mart, Target, Office Max, Office Depot, Staples, Sears, Macy’s, Kohl’s, Best Buy, Barnes & Noble, CVS and Walgreens. In-store prices were checked at Jewel-Osco and Dominick’s, two Chicago-area grocery stores. The analysis included online-only prices for Peapod.com and Amazon.com. The comparison excluded prices offered by third-party sellers on e-retail sites that allow them, such as eBay.com and Amazon.com. Walmart is No. 6 in Internet Retailer’s Top 500 Guide. Target is No. 22, Office Max is No. 9, Office Depot is No. 5, Staples is No. 2, Sears is No. 7, Macy’s is No. 17, Kohl’s is No. 31, Best Buy is No. 11, Barnes & Noble is No. 41, CVS is No. 83, Walgreens is No.73, Peapod is No. 47, and Amazon.com is No. 1.